Portsmouth City Council says tax likely to go up by maximum next year as it seeks to close £24m financial black hole

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COUNCIL tax in Portsmouth is expected to be increased by five per cent next year, as the council looks to close a £24m black hole in its finances.

Despite saying at the beginning of the year that Portsmouth City Council's financial future ‘is looking brighter,' its leader Gerald Vernon-Jackson said this year's 'economic chaos' had weakened this position.

'Our budget process until now was based on there being no need for any more cuts,' he told the Local Democracy Reporting Service. 'That's now changed due to the level of economic pressure we're - and every other council is - under.'

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The council is drawing up plans to plug the £24m funding gap before publishing draft budget proposals in the new year. Cabinet members have been asked to find £3m - either through service cuts or increased income - by director of finance Chris Ward.

Council tax in Portsmouth is likely to go up buy the maximum amount next yearCouncil tax in Portsmouth is likely to go up buy the maximum amount next year
Council tax in Portsmouth is likely to go up buy the maximum amount next year

Much of the pressure is in the council's social care departments with £4m alone coming from the increase in the national minimum wage. However, the council has also been left with ongoing maintenance costs for the mothballed border control post at the port and a multi-million shortfall from its construction.

'We have been given £9m by the government but it's not enough and we will have to see if we can find the rest,' Cllr Vernon-Jackson added. 'This comes from the mess to the national economy caused by the Conservative Party.

'There is new income coming in - the new solar panels will help - but we can't cover everything through this.'

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He said budget forecasts were now being based on an assumption that the maximum possible increase in council tax - five per cent - will come in in April, a step already taken by other local authorities across the country.

As part of its Autumn Statement, the government lifted the maximum amount councils could increase rates before a referendum was required.

The council has had to reduce its budget by £108m since 2011 but documents published at the beginning of this year had expected there to no longer be a need for cuts from 2023/24.

‘I’ve been involved in budget-setting in Portsmouth for 18 years and this is the first time I’ve seen a forecast saying we won’t need to make savings next year,’ Cllr Vernon-Jackson said in February.

‘It’s great news for the city and down to sound financial management.’